S. Korea firms caught importing coal, iron from North

Three South Korean firms were caught importing coal and iron from the North last year, Seoul said Friday, in an apparent violation of UN sanctions imposed in August 2017 on the nuclear-armed state.

More than 35,000 tonnes of North Korean coal and iron worth 6.6 billion won ($5.8 million) were imported into the South between April and October last year, the Korea Customs Service said.

In addition to breaking South Korean law, some of the shipments were likely in breach of UN resolutions as well, with the customs service warning that “any ships that are believed to have violated UN sanctions will be impounded or banned from entering South Korean ports”.

In a complex process spanning three countries, coal shipments were first sent to Russia, where their details were disguised using forged “country of origin” documents, and then reloaded on ships bound for the South, the customs office said in a statement that followed a 10-month investigation by the authorities.

In another case, black coal imported from North Korea was transferred to the Russian port of Kholmsk, where it was “disguised as semi-coking coal that does not need country of origin documents”, before being reloaded on ships heading to the South, the customs office said.

“Korea Customs Service has confirmed seven criminal offences and it will report three persons and three companies to prosecution authorities with a request to indict them”, it said.

“It is necessary to consider the timing of UN resolutions… to determine whether the activities were in breach” of sanctions as well, it added.

Paid in coal, not cash

News of the apparent breach comes after a UN report last week accused the North of evading sanctions by continuing to export coal, iron and other commodities as well as carrying out illegal ship-to-ship transfers of oil products at sea.

Deliveries of iron and steel to China, India and other countries generated nearly $14 million from October to March, the UN report said.

The South Korean investigation also uncovered a trade in pig iron, with the customs office saying that the suspects sold the crude metal to a South Korean buyer via a Hong Kong-based shell company.

It said the suspects appeared to have been paid in coal, rather than cash, for their role in helping the nuclear-armed regime export its products.

Last year the UN Security Council adopted a series of resolutions targeting North Korean exports of commodities and the isolated regime’s financial network in a bid to cut off revenue to its weapons programmes.

A recent diplomatic thaw culminated in a historic meeting between the North’s leader Kim Jong Un and US President Donald Trump in Singapore in June.

But there has been little evidence of concrete post-summit progress on the key issue of denuclearisation, with the North attacking the US for “gangster-like” demands of complete, verifiable and irreversible disarmament.

“It is necessary for South Korea to handle this case cautiously to avoid inflaming the situation”, said Professor Kim Yong-hyun at Dongguk University, pointing to the uneasy detente between Washington and Pyongyang.

Russia and China have called on the Security Council to consider easing sanctions to reward North Korea for opening up dialogue with the United States and halting missile tests.

But Washington has urged the international community to maintain maximum sanctions pressure, even suggesting tougher economic measures, in a bid to compel Pyongyang to give up its nuclear weapons.